Fitch Ratings on Thursday sent its issuer default rating on United Rentals Inc. further into junk territory, after the equipment renter announced plans to buy back up to 27.16 million shares.
Fitch lowered the rating to "B+" from "BB-." Both are non-investment grade ratings. The outlook on the rating is stable.
On Tuesday, United Rentals said it repurchased all of its outstanding series C and series D preferred stock for about $679 million and that it planned to buy back up to 27.16 million shares of common stock. It also entered into a new $1.25 billion asset-based loan facility to help fund the repurchases.
Fitch also affirmed the long-term IDR of United Rentals North America at "BB-," its senior secured credit facility at "BB" and its senior unsecured debt at "BB-." Additionally, Fitch upgraded the subsidiary's subordinated debt to "B+" from "B."
While near-term trends are expected to modestly weaken, Fitch does not anticipate a substantial decline in the Greenwich, Conn.-based company's operating performance.
Shares fell 25 cents to $21.34 in midday trading.
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